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Toyota is preparing to turn its next-generation engines and hybrid technology into a major revenue source by supplying powertrains to other automakers. The Japanese giant expects annual sales from outside manufacturers to climb from approximately $562 million in 2026 to $1.68 billion by 2032.

At the center of this strategy are Toyota’s new compact 1.5-liter and 2.0-liter four-cylinder engines, expected to arrive as early as 2027. The 1.5-liter will be offered in naturally aspirated and turbocharged configurations, with the turbo targeting performance comparable to a traditional 2.5-liter engine. Meanwhile, the new 2.0-liter turbo aims to outperform Toyota’s existing 2.4-liter turbo while delivering improved fuel efficiency.

Both engines are designed to accommodate hybrid electrification, with smaller dimensions allowing greater flexibility across different vehicle platforms.

Potential customers include Toyota’s Japanese partners Subaru, Mazda, Suzuki and Daihatsu, although no new supply agreements have been confirmed. Mazda and Subaru are also developing their own next-generation combustion engines, making their participation uncertain.

Toyota believes sharing powertrain technology will increase production volumes, reduce development costs and strengthen its competitive advantage as global hybrid demand continues growing.

Separately, Toyota is developing a twin-turbocharged 4.0-liter V8, although that engine is not currently included in its external powertrain sales strategy.

source:

https://www.autonews.com/toyota/an-toyota-selling-next-generation-engines-1026/